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Types of Loans

CONVENTIONAL MORTGAGE LOANS (Loan amounts up to $417,000)

30 Year Fixed Rate Mortgage
The traditional 30-year fixed-rate mortgage has a fixed interest rate with a monthly principal and interest payment that never changes. This may be a good choice if you plan to stay in your home for seven years or longer. If you plan to move within seven years, then adjustable-rate loans may be a better solution for your situation.  However,  when interest rates are low, fixed-rate loans are generally not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run, because you can lock in the rate for the life of your loan.

20 Year Fixed Rate Mortgage
The traditional 20-year fixed-rate mortgage also has a fixed interest rate with a monthly principal and interest payment that never changes. It offers the same advantages as the 30 and 15 year fixed rate loans, but with a payment amount that meets in the middle.  This may be the choice for you if you do not not want the higher payment amount typically associated with a 15 year loan or you are trying to avoid extending the term to 30 years.

15 Year Fixed Rate Mortgage
This is a fully amortized loan with a fixed interest rate over a 15-year period and features a monthly principal and interest payment that does not change.   It offers all the advantages of the 30-year loan, plus a lower interest rate—and you will own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn't that great.

Annual ARM (1/1 ARM)
This loan has a rate that is recalculated once a year and is typically amortized over a 15, 20, or 30 year term.

Hybrid ARM (3/1 ARM, 5/1 ARM, 7/1 ARM)
These increasingly popular ARMS—also called 3/1, 5/1 or 7/1—can offer the best of both worlds: lower interest rates (like ARMs) and a fixed payment for a longer period of time than most adjustable rate loans. For example, a 30 year  "5/1 ARM loan" has a fixed monthly principal and interest payment for the first five years and then turns into a traditional adjustable-rate loan that adjusts every year, based on the current rates at time of adjustment, for the remaining 25 years. It's a good choice for people who expect to move (or refinance) before or shortly after the adjustment occurs.

 

JUMBO LOANS - Are for loans with loan amounts in excess of $417,000 up to $1 million.

 

GOVERNMENT LOANS

FHA Loan – This type of loan is insured by the Federal Housing Administration and is available in a fixed-rate loan option on a primary residence.  The down payment requirement can be as low as 3.5%, requires monthly mortgage insurance, and may allow you to use a gift or grant for all or a portion of your closing costs.

VA  Loan – A  Veteran’s Administration mortgage provides financing for qualified Veterans, Reservists, active duty personnel, or eligible family members for their primary residence.  This program is available in a fixed rate loan option, typically requires no down-payment, does not require monthly mortgage insurance, allows closing costs to come from a gift or grant, and offers flexibility when it comes to qualifying ratios.

USDA Loan – Also known as a Rural Development loan is available in a fixed rate-loan option.  This program allows a qualified borrower to purchase a home with no money down for property located in a USDA designated area that will be utilized as the primary residence.  Income restrictions apply. 

VHDA Loan – The VHDA loan is through the Virginia Housing Development Authority and is available in a fixed rate loan option for first time home buyers.  This product has a qualifying income limit, an acreage limit, and the remaining qualifying guidelines are sometimes less restrictive than other loan types.  Plus, you have a low or sometimes a no cash down-payment option. 

 

 

 

 

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